You are quite correct. Interest rates do not have to go anywhere near 15% to inflict as much pain now as in 1992. The reason is that housing costs have already reached the same straining point as a proportion of net income as in the last crash. With the average wage at £24k and the average house at £194k you can see that house prices are already in excess of 8 times earnings. Which is a higher multiple than needed for the last crash and the USA crashed at a multiple of 6.
In the early 1990's it would be very unusual for anyone under the age of 30 to have a credit card or an unsecured loan on anything other than a car.
There were no self certification (lie to buy) mortgages, no 5 times joint salary mortgages and there certainly were not over 1 million amateur landlords with buy to let mortgages (in 1999 there were 30,000 - by 2007 1,000,000 Buy To Let mortgages were in existence..) .
The profit warnings are coming thick and fast now and discounting on the high street has already started.
Its not looking good.
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